Medicare for all?

Sen. Bernie Sanders during a nurses convention rally at Yerba Buena Gardens on Sept. 22 in San Francisco, Calif. Sanders promoted his Medicare for All 2017 plan. It’s fatal flaw lies in its premise — that health care is a right. It is not.

Photo: Santiago Mejia /The Chronicle

In the 2020 presidential campaign, I predict “Medicare for All!” will become the next “Build the Wall!” — a slogan so simple to chant at rallies that it will thrill and unite the political base of the candidate who utters it earliest and most often.

If “Build the Wall!” sounds simple to say on the campaign trail — but maddeningly complex and expensive to enact — “Medicare for All!” is exactly like that, only 3,000 times more complex and more expensive. I say 3,000 times because that’s the ratio of $15 trillion in health care spending to $5 billion for the border wall.

It turns out “Medicare for All” means so many undefined things that it’s essentially meaningless as a phrase.

Medicare is a three-part government insurance program for folks older than 65, with parts named A, B and D that separately corresponds to hospital, doctor and prescription-drug costs, respectively. It doesn’t cover dental or eye care. Medicare recipients, if they have the financial means, also purchase additional insurance to fill in the gaps in their coverage.

So the first thing to realize about the “Medicare for All” slogan is that advocates don’t mean to recreate Medicare for the under-65 crowd. Nobody would set out to design a system for everyone that’s this complicated.

The candidates really mean “universal health care,” but without using those words because they still sound somewhat scary in 2019. Democrats mean to cover the costs of hospitals, doctor visits, prescription drugs and everything else involved in health care.

The second thing is to distinguish between different versions of “Medicare for All” — some want bold revolutions, others more modest changes.

Sen. Bernie Sanders, along with U.S. Reps. Keith Ellison and Alexandria Ocasio-Cortez, advocates bold “Medicare for All.” In his all-encompassing approach, a government-run, single-payer program would replace the private marketplace, which includes 150 million mostly employer-sponsored plans, thereby gaining powerful pricing power over hospitals, physicians and pharmaceuticals.

Sanders’ plan allows for private, supplemental insurance for those who can afford it.

Overall, we’d get much greater equality, but also some rationing of health services. We’d also have powerful groups — private insurance companies, hospitals, health care professionals, and pharmaceutical companies to name a few — resist this as if it were the apocalypse, which, from their perspective, it might be.

Vox.com tracks six incremental proposals from Democratic leaders that maintain private employer-sponsored insurance. Any of these six is much more likely to win congressional approval after the 2020 elections, but also is much more likely to prove extremely unpopular to some people, without fully satisfying the Sanders crowd.

The problem with implementing “Medicare for All” in an incremental, thoughtful and financially sound way is that anything short of full-on, government-run health insurance involves crazily complex financial and political decisions.

Want to be fiscally prudent about government expenditures by requiring everyone to pay high deductibles for care? It makes financial sense to do that. But a $1,000 deductible for a single medical problem will make that candidate’s plan as popular as free root canals at an 8-year-old’s birthday party. (That was a big flop when my wife and I tried it last year.)

Want to offer a public government-insurance option that competes with, but does not replace, the private employer-sponsored health plans? If you’re being careful with costs, that public option insurance is going to be expensive and, at the same time, miserly.

In the grand scheme of things, the Affordable Care Act (aka Obamacare) was an incremental, fiscally-prudent, moderately ambitious and therefore unpopular program. People hate that the cost of their ACA-acquired insurance is high, and their deductibles are high. That’s a direct result of the Obamacare designers trying to be prudent. Fiscal prudence means the government pays less, so the insured pays more. Nobody likes that!

But as Vox.com’s Ezra Klein writes, a main question Democrats have about a future “Medicare For All” plan is whether to even attempt to be financially responsible. They just watched a unified Republican government pass an extremely irresponsible tax cut in 2017, and they feel like naïve nerds for trying to balance the budget with Obamacare. The next time they have power, maybe their better strategy is to advocate for bold Medicare for All without making any fiscally prudent, unpopular compromises. Like, if Paul Ryan can completely ignore fiscal restraint, why shouldn’t they?

Now, my fellow fiscal conservatives, is this all financially insane?

Answering that question realistically would involve a much better defined set of parameters. The problem of evaluating the fiscal impact of “Medicare for All” is that we have no idea which ideas will move forward. It basically depends on which wing of the Democratic Party beats down the others.

But the case for some version of “Medicare for All” not being insane is this: European countries and Canada manage to produce better outcomes at half the costs of health care in the US by offering affordable universal coverage — and the last I checked, the European countries and Canada still exist.

Not only that, but Europe and Canada view our approach to health care as financially insane. Paying more for worse outcomes? One country’s perfect sense is another country’s crazy.

Speaking of crazy, I’ll tell you my “Medicare for All” platform: I am sick and tired of Canada having better health outcomes at a fraction of the cost that we pay. When I am president, I will not stand for this. Those sneaky Cannucks are ripping us off somehow.

I promise you this when I am president: Canada will pay for our “Medicare For All!”

Thank you all for your support.

Michael Taylor is a columnist for the San Antonio Express-News and author of “The Financial Rules For New College Graduates.”

Michael Taylor graduated magna cum laude from Harvard in 1995. He was a Fulbright Scholar in Mexico in 1996, and worked as a fixed income consultant from 1996 to 1997. He sold bonds for Goldman Sachs in the Emerging Markets and Mortgage Departments from 1997 to 2004. In 2004, he founded Cedarcrest Capital LLC, a purchaser of distressed fixed income assets. Taylor also serves as finance chair and investment chair for the board of trustees of the Armand Hammer United World College of the American West.

He and his family moved to San Antonio in 2009. He has co-taught a personal finance course at Trinity University and writes the finance blog www.Bankers-Anonymous.com.